Taylor, Bean & Whitaker: Five years later

Looking back at a dark day

A Federal Agent leads Lee Farkas to a van after his first appearance at the Golden-Collum Memorial Federal Building & U.S.Courthouse in Ocala, Fla. on Thursday, June 17, 2010. On the fifth anniversary of the collapse of Taylor, Bean and Whittaker, what happened to the TBW building/bank and Marion Theatre; the restaurants, the car wash, philanthropic endeavors; the court appeals, etc.

Bruck Ackerman/Star-Banner

Published: Saturday, August 2, 2014 at 7:35 p.m.

Last Modified: Saturday, August 2, 2014 at 7:35 p.m.

Life goes on outside the walls of the medium security prison at Butner, North Carolina, where Lee Bentley Farkas is serving a 30-year term for masterminding a $2.9 billion fraud that brought down his Ocala-based Taylor, Bean and Whitaker Mortgage Corp., one of the nation's largest mortgage lenders.

Five years ago today, federal agents raided the Northeast 14th Street headquarters of Farkas' flagship company in Ocala. Thus began the process that within days closed his business and, ultimately, dismantled his numerous holdings and ended his extravagant lifestyle, which authorities say was funded with the $38.5 million he misappropriated from those and other affiliated institutions.

Now that many of the trials, lawsuits and bankruptcies have been settled, the properties that once comprised Farkas' empire are in others' hands and/or control.

Here's a look, five years later, at the local aftermath of what began on Aug. 3, 2009.

Farkas

On June 30, 2011, Farkas was sentenced in U.S. District Court in Alexandria, Virginia, after a jury found him guilty of six counts of bank fraud, four counts of wire fraud, three counts of securities fraud, and conspiracy to commit bank fraud, wire fraud and securities fraud.

Farkas, now 61, also was ordered to forfeit $38.5 million in assets and pay restitution.

His first appeal failed in June 2012. A second was rejected last month.

A few other co-defendants were sentenced to shorter prison terms. But the New York Times said the Farkas case “stands as the single-biggest prosecution stemming from the financial crisis.”

Local employment

When TBW shut down, shortly after the raid, more than 1,000 local people lost their jobs. Many of those white-collar workers were making good money.

In September and October 2009, the first months when the layoffs could register, the unemployment rate stood at 13.4 percent.

Today, unemployment stands at 7.2 percent, though some of the newer jobs in the area are part time or not as well paying as the ones lost — at TBW and elsewhere.

Certainly, the employment picture was bad before TBW shut down. But the mass layoff was one of the biggest shocks to the local employment market in memory.

“These talented, skilled people ended up unemployed or with low-paying jobs that are just not enough to cover them for one unexpected expense like an illness or major car repair,” said Toni James, a former head of the United Way of Marion County and now owner of her own public relations firm.

“Hopefully some forward-looking employers will embrace a higher minimum wage for the long-term benefits it will create,” she said.

Kelly Simms Graham worked for TBW in Crystal River. She was home eating lunch on Aug. 3, 2009, when she got a phone call.

“I was told to come pack up my desk because the feds were shutting us down,” Graham recalled.

She went back to school and got an associate's degree. She's a service coordinator for an electrical contractor in Homosassa, but making less money now than she did even before she started with TBW.

“I can't even say I'm back where I started from,” she said.

The headquarters

The building at 305 NW 14th St. was once the opulent home office of TBW.

Sunshine reflects ice blue rays off the mirrored glass walls at the entrance to the 74,000-square-foot headquarters, which Farkas built in 2008 for $21 million. He sold it to a New York investor and then leased it back.

The building featured a full-scale theater, executive dining room, terrace, and also Community Platinum Bank, the Rolling Meadows, Illinois, bank owned by Farkas. The bank, with its onyx lobby walls, was closed by the Office of Thrift Supervision in September 2009.

The building quickly went up for sale for $14 million. But the economy declined and the building remained vacant for years. It subsequently went on the auction block and was sold to trucking company magnate Larry Roberts in October 2012 for $4.2 million.

“It was grandiose in every way,” said Bartow McDonald, a broker with Sperry Van Ness, which oversaw the auction.

McDonald said one of the features was a trading room.

“There was a floor that looked like something out of Wall Street,” McDonald said. “The board room overlooked the trading floor.”

Other office buildings

Ansafone Contract Centers LLC purchased the former Maslow Insurance building at 101 NE Second St., another Farkas-owned facility. That building sat vacant for three years before Ansafone turned it into a thriving call center. Shortly thereafter, the company moved its Santa Ana, California, headquarters into the building, while still maintaining its California office.

“They have totally remodeled that building,” McDonald said. “It was really neat watching both those properties be transformed and have a new life and jobs created with new ownership.”

Ansafone received about $850,000 in incentives from the city and county and estimated it would spend $500,000 for building renovations and $1.5 million for equipment. In return it is expected to create 300 jobs by Dec. 31, 2015.

Sitel Worldwide Corporation opened a new call center at 1417 N. Magnolia Ave. That building, just west of the former TBW headquarters, was used as TBW's document processing center. In an earlier life, it was a Winn-Dixie supermarket.

Sitel has renovated the facility using about $200,000 of a $2.5 million incentive package from the city of Ocala and Marion County. In exchange, it is expected to create 500 jobs by Dec. 31, 2014.

The Marion Theatre

Film festivals and first-run movies still help fill the seats at the Marion Theatre, now operated by Carmen and Cesar Soto.

Prior to his run-in with the law, Farkas had signed a 30-year lease with the city of Ocala to run the historic, city-owned theater off South Magnolia Avenue. He poured an estimated $1.3 million into restoring the downtown cinema to is historic beginnings.

By the time the city canceled the lease in November 2009, Farkas owed $17,600 in back rent and $8,400 in electric charges. The city forgave those debts because Farkas had refurbished the theater and had donated about $150,000 for three years to support the city-operated holiday ice skating rink.

The city also did not wish to spend an estimated $12,000 in a protracted legal battle.

Sky and Ipanema were the crown jewels in Farkas' collection. He once said he wanted “different types of restaurants” — nicer places, the kind where he could entertain clients.

Danny Gaekwad simply took over Sky, which sits on half of the top floor of his Holiday Inn at Interstate 75 and State Road 200.

Taking over Sky was easier than finding a new restaurant for the space.

“I never really wanted to run a restaurant, but now I'm in, so I'm going make some improvements,” the international entrepreneur said at the time.

Within a year Sky won a coveted Golden Spoon Award honoring Florida's best restaurants — the first in Ocala to receive one. With three more from Florida Trend since, Sky could be enshrined in the magazine's Golden Spoon Hall of Fame, which recognizes continued excellence.

Ipanema, a churrascaria at 2023 S. Pine Ave., limped along under newly independent Dine Design until 2011, when it failed to pay $90,000 in state sales taxes, fees and penalties. This could have led to an ignoble end for the posh eatery.

But Latinos Y Mas owner Webster Luzuriaga stepped across the street from his popular eatery and brought Ipanema back from the brink.

Under his watch, Ipanema repaid the state and returned to profitability. In late 2012, Luzuriaga was allowed to buy the restaurant out of foreclosure. It continues to be a popular dining spot.

Dee Dee's, first known as Dee Dee's Dog House, was TBW's initial foray into food. Opened by Nada Restaurant — as Dine Design was called then — it occupied a spot in Ocala's historic Union Station at 531 NE First Ave.

In 2007, TBW moved Dee Dee's to The Villages and closed the train station site. But it revived in 2010 when the Katsoufis family came from Jacksonville to open it as Dee Dee's Diner, a breakfast and lunch spot.

But Dog House days aren't gone completely. Katsoufis said she still gets calls from people asking, “Do you board dogs?” — even though the Dog House never did.

She laughed and said she typically replies, “Yeah, but only in the freezer!”

Other businesses

Farkas owned Compass Health and Fitness, with two locations in Ocala: 524 S. Pine Ave. and 2600 SW College Road.

In July 2010, after his indictment, Farkas sold the Southwest College Road location to owners who established a new gym, All Pro Fitness. That health club closed on New Year's Eve 2011. Ocala Health and Fitness opened in that space in March 2013.

Compass was evicted from the South Pine location in February 2012, with Farkas' name still on the lease at the time. The South Pine gym later reopened under new ownership as Brick City Health & Fitness.

In recent weeks, Brick City management announced a transition to new majority ownership and management. Ben Marciano, longtime executive director of the Frank DeLuca Family YMCA, is the new president and owner of what is now called Zone Health & Fitness.

Meanwhile, Cactus Car Wash, another of Farkas' former holdings, has operated without interruption since opening in April 2009 at 815 S. Pine Ave. The Marion County Property Appraiser's site lists Coda Roberson and Sean Murla, former associates of Farkas, as its owners.

Nada Airline Inc., another of Farkas' companies, had a lease on a hangar and 1.47 acres at Ocala International Airport. The city of Ocala, not wanting to engage in an expensive legal battle, allowed the lease to be assigned to Leon Ocala Hangar LLC, a company owned by Miami businessman Benjamin Leon Jr.

The Parker House

The city of Ocala has wrestled away ownership of the Parker-Menchan House from the Taylor, Bean Foundation Inc., which dissolved when TBW went bankrupt in 2009.

Before her death, Thelma M. Parker, longtime Ocala educator and community leader, donated the family home built by her father, Theodore H. Menchan Sr., in 1910, to support the city's efforts to revitalize the West Ocala Historic District.

The house was in such disrepair it had to be torn down. The Taylor Bean Foundation paid for the building renovation materials and Habitat for Humanity volunteers provided the labor to build a replica.

The new house was to be sold to reimburse the foundation for the materials. But the house was never sold and remained the foundation's property, all but forgotten in the TBW debacle.

The city was able to secure title to the home off West Silver Springs Place and sold it in June 2013 to Mary Rutledge, a retired Marion County teacher, who wants to organize a beautification club and start a reading club for the children in her neighborhood.

<p>Life goes on outside the walls of the medium security prison at Butner, North Carolina, where Lee Bentley Farkas is serving a 30-year term for masterminding a $2.9 billion fraud that brought down his Ocala-based Taylor, Bean and Whitaker Mortgage Corp., one of the nation's largest mortgage lenders.</p><p>Five years ago today, federal agents raided the Northeast 14th Street headquarters of Farkas' flagship company in Ocala. Thus began the process that within days closed his business and, ultimately, dismantled his numerous holdings and ended his extravagant lifestyle, which authorities say was funded with the $38.5 million he misappropriated from those and other affiliated institutions.</p><p>Now that many of the trials, lawsuits and bankruptcies have been settled, the properties that once comprised Farkas' empire are in others' hands and/or control.</p><p>Here's a look, five years later, at the local aftermath of what began on Aug. 3, 2009.</p><p><b>Farkas</b></p><p>On June 30, 2011, Farkas was sentenced in U.S. District Court in Alexandria, Virginia, after a jury found him guilty of six counts of bank fraud, four counts of wire fraud, three counts of securities fraud, and conspiracy to commit bank fraud, wire fraud and securities fraud.</p><p>Farkas, now 61, also was ordered to forfeit $38.5 million in assets and pay restitution.</p><p>His first appeal failed in June 2012. A second was rejected last month.</p><p>A few other co-defendants were sentenced to shorter prison terms. But the New York Times said the Farkas case “stands as the single-biggest prosecution stemming from the financial crisis.”</p><p><b>Local employment</b></p><p>When TBW shut down, shortly after the raid, more than 1,000 local people lost their jobs. Many of those white-collar workers were making good money.</p><p>In September and October 2009, the first months when the layoffs could register, the unemployment rate stood at 13.4 percent.</p><p>Today, unemployment stands at 7.2 percent, though some of the newer jobs in the area are part time or not as well paying as the ones lost — at TBW and elsewhere.</p><p>Certainly, the employment picture was bad before TBW shut down. But the mass layoff was one of the biggest shocks to the local employment market in memory.</p><p>“These talented, skilled people ended up unemployed or with low-paying jobs that are just not enough to cover them for one unexpected expense like an illness or major car repair,” said Toni James, a former head of the United Way of Marion County and now owner of her own public relations firm.</p><p>“Hopefully some forward-looking employers will embrace a higher minimum wage for the long-term benefits it will create,” she said.</p><p>Kelly Simms Graham worked for TBW in Crystal River. She was home eating lunch on Aug. 3, 2009, when she got a phone call.</p><p>“I was told to come pack up my desk because the feds were shutting us down,” Graham recalled.</p><p>She went back to school and got an associate's degree. She's a service coordinator for an electrical contractor in Homosassa, but making less money now than she did even before she started with TBW.</p><p>“I can't even say I'm back where I started from,” she said.</p><p><b>The headquarters</b></p><p>The building at 305 NW 14th St. was once the opulent home office of TBW.</p><p>Sunshine reflects ice blue rays off the mirrored glass walls at the entrance to the 74,000-square-foot headquarters, which Farkas built in 2008 for $21 million. He sold it to a New York investor and then leased it back.</p><p>The building featured a full-scale theater, executive dining room, terrace, and also Community Platinum Bank, the Rolling Meadows, Illinois, bank owned by Farkas. The bank, with its onyx lobby walls, was closed by the Office of Thrift Supervision in September 2009.</p><p>The building quickly went up for sale for $14 million. But the economy declined and the building remained vacant for years. It subsequently went on the auction block and was sold to trucking company magnate Larry Roberts in October 2012 for $4.2 million.</p><p>Today, employees of R&L Carriers Inc.'s subsidiaries work inside the stylish offices.</p><p>“It was grandiose in every way,” said Bartow McDonald, a broker with Sperry Van Ness, which oversaw the auction.</p><p>McDonald said one of the features was a trading room.</p><p>“There was a floor that looked like something out of Wall Street,” McDonald said. “The board room overlooked the trading floor.”</p><p><b>Other office buildings</b></p><p>Ansafone Contract Centers LLC purchased the former Maslow Insurance building at 101 NE Second St., another Farkas-owned facility. That building sat vacant for three years before Ansafone turned it into a thriving call center. Shortly thereafter, the company moved its Santa Ana, California, headquarters into the building, while still maintaining its California office.</p><p>“They have totally remodeled that building,” McDonald said. “It was really neat watching both those properties be transformed and have a new life and jobs created with new ownership.”</p><p>Ansafone received about $850,000 in incentives from the city and county and estimated it would spend $500,000 for building renovations and $1.5 million for equipment. In return it is expected to create 300 jobs by Dec. 31, 2015.</p><p>Sitel Worldwide Corporation opened a new call center at 1417 N. Magnolia Ave. That building, just west of the former TBW headquarters, was used as TBW's document processing center. In an earlier life, it was a Winn-Dixie supermarket.</p><p>Sitel has renovated the facility using about $200,000 of a $2.5 million incentive package from the city of Ocala and Marion County. In exchange, it is expected to create 500 jobs by Dec. 31, 2014.</p><p><b>The Marion Theatre</b></p><p>Film festivals and first-run movies still help fill the seats at the Marion Theatre, now operated by Carmen and Cesar Soto.</p><p>Prior to his run-in with the law, Farkas had signed a 30-year lease with the city of Ocala to run the historic, city-owned theater off South Magnolia Avenue. He poured an estimated $1.3 million into restoring the downtown cinema to is historic beginnings.</p><p>By the time the city canceled the lease in November 2009, Farkas owed $17,600 in back rent and $8,400 in electric charges. The city forgave those debts because Farkas had refurbished the theater and had donated about $150,000 for three years to support the city-operated holiday ice skating rink.</p><p>The city also did not wish to spend an estimated $12,000 in a protracted legal battle.</p><p><b>The restaurants</b></p><p>The restaurants launched by TBW subsidiary Dine Design Group — Sky Asian Fusion, Ipanema Brazilian Steak House and, eventually, Dee Dee's Diner — have survived and thrived.</p><p>Sky and Ipanema were the crown jewels in Farkas' collection. He once said he wanted “different types of restaurants” — nicer places, the kind where he could entertain clients.</p><p>Danny Gaekwad simply took over Sky, which sits on half of the top floor of his Holiday Inn at Interstate 75 and State Road 200.</p><p>Taking over Sky was easier than finding a new restaurant for the space.</p><p>“I never really wanted to run a restaurant, but now I'm in, so I'm going make some improvements,” the international entrepreneur said at the time.</p><p>Within a year Sky won a coveted Golden Spoon Award honoring Florida's best restaurants — the first in Ocala to receive one. With three more from Florida Trend since, Sky could be enshrined in the magazine's Golden Spoon Hall of Fame, which recognizes continued excellence.</p><p>Ipanema, a churrascaria at 2023 S. Pine Ave., limped along under newly independent Dine Design until 2011, when it failed to pay $90,000 in state sales taxes, fees and penalties. This could have led to an ignoble end for the posh eatery.</p><p>But Latinos Y Mas owner Webster Luzuriaga stepped across the street from his popular eatery and brought Ipanema back from the brink.</p><p>Under his watch, Ipanema repaid the state and returned to profitability. In late 2012, Luzuriaga was allowed to buy the restaurant out of foreclosure. It continues to be a popular dining spot.</p><p>Dee Dee's, first known as Dee Dee's Dog House, was TBW's initial foray into food. Opened by Nada Restaurant — as Dine Design was called then — it occupied a spot in Ocala's historic Union Station at 531 NE First Ave.</p><p>In 2007, TBW moved Dee Dee's to The Villages and closed the train station site. But it revived in 2010 when the Katsoufis family came from Jacksonville to open it as Dee Dee's Diner, a breakfast and lunch spot.</p><p>Nowadays, hot dogs share the board with Greek and Italian specialties. “We didn't want to sell just hot dogs,” Teresa Katsoufis said.</p><p>But Dog House days aren't gone completely. Katsoufis said she still gets calls from people asking, “Do you board dogs?” — even though the Dog House never did.</p><p>She laughed and said she typically replies, “Yeah, but only in the freezer!”</p><p><b>Other businesses</b></p><p>Farkas owned Compass Health and Fitness, with two locations in Ocala: 524 S. Pine Ave. and 2600 SW College Road.</p><p>In July 2010, after his indictment, Farkas sold the Southwest College Road location to owners who established a new gym, All Pro Fitness. That health club closed on New Year's Eve 2011. Ocala Health and Fitness opened in that space in March 2013.</p><p>Compass was evicted from the South Pine location in February 2012, with Farkas' name still on the lease at the time. The South Pine gym later reopened under new ownership as Brick City Health & Fitness.</p><p>In recent weeks, Brick City management announced a transition to new majority ownership and management. Ben Marciano, longtime executive director of the Frank DeLuca Family YMCA, is the new president and owner of what is now called Zone Health & Fitness.</p><p>Meanwhile, Cactus Car Wash, another of Farkas' former holdings, has operated without interruption since opening in April 2009 at 815 S. Pine Ave. The Marion County Property Appraiser's site lists Coda Roberson and Sean Murla, former associates of Farkas, as its owners.</p><p>Nada Airline Inc., another of Farkas' companies, had a lease on a hangar and 1.47 acres at Ocala International Airport. The city of Ocala, not wanting to engage in an expensive legal battle, allowed the lease to be assigned to Leon Ocala Hangar LLC, a company owned by Miami businessman Benjamin Leon Jr.</p><p><b>The Parker House</b></p><p>The city of Ocala has wrestled away ownership of the Parker-Menchan House from the Taylor, Bean Foundation Inc., which dissolved when TBW went bankrupt in 2009.</p><p>Before her death, Thelma M. Parker, longtime Ocala educator and community leader, donated the family home built by her father, Theodore H. Menchan Sr., in 1910, to support the city's efforts to revitalize the West Ocala Historic District.</p><p>The house was in such disrepair it had to be torn down. The Taylor Bean Foundation paid for the building renovation materials and Habitat for Humanity volunteers provided the labor to build a replica.</p><p>The new house was to be sold to reimburse the foundation for the materials. But the house was never sold and remained the foundation's property, all but forgotten in the TBW debacle.</p><p>The city was able to secure title to the home off West Silver Springs Place and sold it in June 2013 to Mary Rutledge, a retired Marion County teacher, who wants to organize a beautification club and start a reading club for the children in her neighborhood.</p>